DOE gives conditional approval of loan guarantee
for huge Agua Caliente solar PV project in Arizona
Feb 1, 2011 - Tom Cheyney- PV-tech.org
The U.S. Department of Energy has made a conditional
commitment of a loan guarantee worth up to $967 million
for the 290MW (AC) Agua Caliente solar PV farm, located
on 2400 acres of former agricultural land site east
of Yuma, AZ. Preliminary construction on the site
has begun, with the first electricity expected to
be produced later this year or early 2012. The entire
project is scheduled for completion in 2014.
NRG Energy announced in December that its solar
subsidiary had reached an agreement with First Solar
to buy the Agua Caliente project and planned to invest
up to $800 million in equity, on the condition of
the approval of the DOE loan guarantee.
The power plant (equivalent to about 348MW [DC])
will be designed, built, and operated by First Solar
and will be equipped with around 4 million of the
company’s cadmium-telluride thin-film PV modules.
Some 400 construction and other jobs will be created
over the course of the project.
When completed, the project will be the largest
utility-scale PV generation facility in the world,
according to the companies and DOE.
Pacific Gas & Electric has already signed a
25-year power purchase agreement for the electricity
generated by Agua Caliente, which will be carried
by the existing Hassayampa-North Gila 500KV transmission
line adjacent to the site.
For the first time on a utility-scale U.S. PV plant,
fault ride-through and dynamic voltage regulation
technologies will be used to help deal with voltage
sag and swell and other power system disturbances,
and maintain the reliability and stability of the
grid transmission systems.
Although the announcement means the final award
of the loan guarantee is likely, it is not a done
deal.
NRG spokesman David Knox told PV-Tech via email
that the “actual financial close” of
the loan guarantee “is subject to customary
condition precedents to any financing,” including “delivery
of final documentation, completion of due diligence,
receipt of final credit rating, and receipt of all
final approvals related to the project and the loan.”
While it cannot predict the exact timeline, the
company anticipates “a minimum of two months
will be needed to fulfill” those precedents
to achieve a closing of the loan agreement.
The size of the loan guarantee could also change,
according to Knox.
“The amount is subject to DOE completing its
due diligence and confirming the amount of costs
that are eligible to be financed under the DOE Loan
Guarantee program,” he explained. “Among
other things, changes in cost and interest rate could
affect the amount of the loan.”
The NRG spokesman also confirmed that the company
will not raise any other financing at the project
level, explaining that it “will rely on its
existing cash on-hand and liquidity facilities to
provide cash equity and letters of credit.”
At the project site, “switchyard site preparation
and access road construction began in Q3 2010,” said
First Solar spokesman Alan Bernheimer in an email
to PV-Tech. “Construction will not ramp until
the close of financing, which is expected in Q2 2011.”
Bernheimer, who noted that no permitting or other
regulatory issues remain to be settled, said that
the Agua Caliente project “is expected to synchronize
with the power grid and start to sell initial power
under its power sales contract with PG&E in late
2011 or early 2012.”
He stated that First Solar has not disclosed what
type of inverters or other balance of systems gear
will be deployed for the project, nor whether the
company’s newly acquired RayTracker tracking
systems will be used on the former White Wing Ranch
site..
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